Trinity Financial Services
Steve Hennessy is the founder and President of Trinity Financial Services located in Miami, Florida. Steve is an independent financial advisor, helping people for 34 years to protect their assets, invest wisely, and plan for a worry-free retirement. As a result of his planning strategies, his clients are well educated and confident of their financial future. Steve is also a certified educator with the American Financial Education Alliance (a 501c3 non-profit organization), offering a wide range of financial education workshops designed to help people take control of their finances. Steve is currently licensed in the states of Florida, North Carolina, and South Carolina.
Steve graduated from the University of Florida in 1969 with a degree in Business Management and Finance. Upon graduating, Steve served as a U.S. Army Signal Officer during the Vietnam era, and eventually retired as a Lieutenant Colonel in the Army Reserves. He continued his education and received his MBA from Florida International University in 1985. He began his career as a financial advisor and registered representative in 1982, building his business with such companies as New England Life, Mutual of New York, Transamerica and John Hancock. Steve received his Life Underwriter Training certification (LUTCF) in 1986 to broaden his professional education in life insurance, annuities, disability income insurance, and long term care insurance.
Each year, Steve educates area residents by holding public and private educational seminars. The topics include: safe investment alternatives, protecting yourself from market losses, avoiding probate, the ABCs of conservative investing, securing long term care protection to help enjoy retirement, and much more. Steve is a resident of Palmetto Bay, Florida, a suburb of Miami, and has been happily married to his wife Donna for over 31 years. Together they have a grown daughter, Laurelle, age 31 and a beautiful, energetic 4 year old grandson named Carson.
BS, Management and Finance, University of Florida
MBA, Finance, Florida International University
Great news...life insurance proceeds payable to a named beneficiary (a real person) is free of federal income tax. So, 100% of the benefit is free.
However, if the life insurance death benefit is paid in installments instead of a lump sum, the interest portion (if any) is taxable. The principal is tax-free.
The insurance proceeds may be included in the taxable estate of the owner. Not to worry, though...the estate tax exclusion is over $5.3 million. So, estate taxes is a mute point for most people. Only if the net taxable estate (after certain deductions) is over $5.3 million would the family have to worry about estate taxes.
Your maximum Social Security payment in 2016 is:
1) $2,638 at Full Retirement Age
2) $2,102 at age 62 (your earliest claiming age)
3) $3,576 at age 70
If you can wait until age 70, that not only gives you the highest benefit, but also gives your spouse (if you are married) the highest survivor benefit at your death. Check out Social Security's website (www.ssa.gov) for lots of great information. Good luck!
Term insurance provides life insurance coverage for a particular period of time for a specified premium. For example, a $100,000 20-year term policy for an annual premium of $1,000 is a contract that allows you to protect your beneficiaries for the next 20 years. At the end of 20 years, the coverage either ends, or you can continue the coverage at a much higher premium.
Universal life insurance is a form of "permanent" lifetime insurance. You'll pay a higher premium for that $100,000, but you'll have so much more flexibility. The insurance company will create a "cash value" account in this policy, and offer a guaranteed minimum interest rate on the growth. Part of your premium is used to pay for the annual cost of insurance, and the other part goes into a growing cash account that you can access at any time. Other benefits include:
1) Adjustable coverage, so you can increase or decrease the death benefit as your needs change.
2) Flexible payment options, so you'll be able to increase, decrease, or even stop your premium payments as your circumstances change.
3) Growing cash value, so you'll have a "bank account" inside your policy that you can access for emergencies, college expenses, supplemental retirement income, or any other cash needs you may have.
Hope this helps. Good luck!
I would hold out the $100,000 that you may need in one or two years and just put it in a bank account. That way you'll have your liquidity. Yes, it may not earn much in that two years, but your money will be immediately accessible and you won't pay fees.
For the other $100,000, I recommend a fixed index annuity through life insurance companies. It's truly a wonderful products, offering some great benefits:
1) 100% guarantee on your deposits. You can't lose your money.
2) Upside without the downside: your account value growth is linked to the market, so if the market goes up, you participate in the gains. But if the market goes down, you don't lose a penny. And...all gains are locked in and become part of your principal.
3) Tax-deferred growth.
4) A guaranteed lifetime income where you have control and get to decide when to turn it on.
5) No annual management fees.
Thank you for your question. Good luck!
If you plan on working a bit longer, and can delay your Social Security check until age 70, you will have accomplished something that financial planners recommend to their clients but rarely comes about. You will begin receiving the largest Social Security check you can ever receive (i.e. 32% more than if you had taken Social Security at you Full Retirement Age (Age 66)).
Retirement is about guaranteed lifetime income, so I would opt for the pension. However, a big caveat...check with your insurance professional to see if you could get a bigger paycheck elsewhere. You would tell your insurance person what your lump sum would be, and he/she can "shop" to see if you can get a bigger paycheck than your pension. A deferred fixed index annuity with an income rider would be my recommendation. That way, you can receive a lifetime income, but at death you'll be able to leave the balance of your annuity to your beneficiaries.
Taking a lump sum is a risky in retirement, especially if your son may be living with you for awhile. Lump sums can be decimated by a lot of things, including market losses, lawsuits, living too long, etc. A good steady stream of income will keep you happy, and you'll be able to spend with confidence. Good luck, and thanks for checking out Investopedia. Here's a great article from the Wall Street Journal that may be of interest.